Royal Bank Beats Earnings Estimates; Hikes Dividend

Royal Bank of Canada (NYSE: RY – $73.92) reported net income of $3.027 billion for the first quarter ended January 31, 2017, up $580 million or 24% from a year ago. Results of the country’s largest bank by assets showed strong earnings in Personal & Commercial Banking, Wealth Management, Capital Markets and Investor & Treasury Services. The company’s performance also reflects benefits from its ongoing focus on efficiency management activities, driving strong operating leverage across most of its business segments. RBC said adjusted earnings to exclude a C$212 million gain from the sale of Moneris Solutions Inc., the U.S. operations of a payment processor and other items, came in at C$1.87 per share. Revenue rose 2% to C$9.55 billion. Analysts had expected adjusted earnings per share of C$1.77 and revenue of C$9.58 billion. The bank also raised its quarterly payout by 5% to an annualized rate of C$3.48 per share yielding about 3.8%. It should be mentioned that the attractive dividend yield and the projections to the end of the decade hold that further, steady hikes in the payout will very likely take place. The high-quality shares have gained about 48% over the past year and can be maintained in a well-diversified income portfolio for handsome total returns.